The Complete Guide to Cashing Third Party Checks at Walmart
In 2024, Walmart no longer cashes third party checks due to rising fraud concerns and stricter banking industry regulations. This represents a notable shift from Walmart‘s previous policy of cashing these higher risk checks. This guide will examine the risks of third party checks, why Walmart changed its policy, where else you can cash third party checks today, and tips for safely cashing third party checks.
What are Third Party Checks and Why are They Risky?
A third party check is a check that has been signed over by the original payee to another third party recipient. For example:
- John receives a payroll check from his employer ABC Company.
- Rather than cash or deposit the check, John signs the back of the check over to his roommate Sue.
- The check is now considered a third party check with Sue as the recipient, even though the check was originally made out to John by ABC Company.
Third party checks introduce higher risks because the person cashing the check is not the original intended recipient. According to estimates from the check verification company Certegy, approximately 1-1.5% of third party checks will eventually bounce compared to only 0.2% of first party checks where the recipient name matches the check.
Banks and retailers are very wary of accepting third party checks because there is a greater chance of fraud in a third party check transaction. Some common examples include:
- John‘s endorsement signature may be forged if he did not actually sign over the check to Sue.
- The original payer may put a stop payment on the check if they discover John was not entitled to the funds.
- Sue may be using a fake ID during the cashing process.
- The routing numbers, account numbers, or check amounts could be altered after John endorsed the check.
According to the American Bankers Association, check fraud costs US financial institutions over $15 billion per year. Many banks and retailers have re-evaluated policies around higher risk items like third party checks as a result.
Walmart‘s Policy on Cashing Third Party Checks Over Time
| Year | Walmart Policy |
|---|---|
| Prior to 2015 | Would cash third party checks up to $5,000 with identification |
| 2015 – 2019 | Reduced third party check limit to $2,500 |
| 2020 – 2022 | No longer cashed personal third party checks, only accepted certain business checks |
| As of 2023 | Does not cash any kind of third party check |
Walmart had historically been one of the most convenient places to get third party checks cashed. They were one of the few major retailers who offered this service. However, as fraud rates have climbed and banking regulations have tightened around check cashing, Walmart could no longer justify the risks and compliance requirements involved with third party checks.
In 2024, Walmart joined competitors like Target and Costco in discontinuing third party check cashing entirely. This represents a victory for fraud prevention but an inconvenience for legitimate customers needing to cash these types of checks.
Where You Can Still Cash Third Party Checks Today
While Walmart no longer offers third party check cashing services, there are some other options still available in 2024. However, be prepared to pay higher fees, meet stricter ID and verification requirements, and potentially open a bank account.
Banks
Most major banks will cash third party checks, but only for existing bank account holders. The typical fee for a third party check will run $10 or more per check. Large banks like Bank of America, Wells Fargo, and Chase all follow this model.
Banks will usually require multiple forms of current ID as well as verifying funds before cashing third party checks. Some may place extended holds on the deposited funds before making them available to customers. This helps the bank manage risk.
Credit Unions
Like banks, credit unions will cash third party checks as a service for members. The fees are typically less than at banks, often around $5 per check. Documentation and verification requirements are similar to banks.
Check Cashing Stores
Stores like Ace Cash Express, Check ‘n Go, and Check Into Cash offer third party check cashing for non-customers. But their fees are usually the highest among all options, often starting around 5-10% of the check value.
These stores also present higher fraud risks as they are not able to verify funds and will sometimes accept fake, forged, or stolen checks. Requirements for ID verification are typically lower as well.
Private Sellers
There are some private sellers and websites that advertise third party check cashing services for a fee. This option carries major risks though as there are typically no ID checks or capability to verify funds before cashing checks. It‘s an easy source of fraud against private buyers.
P2P Apps
A newer option is using peer-to-peer payment apps like Venmo, CashApp, or PayPal to endorse and "cash" third party checks. Users sign the check over to the app via a photo deposit and the app provides instant funds in return after taking their fee. This carries less fraud risk than private sellers.
Pros and Cons of Third Party Check Cashing Options
| Option | Pros | Cons |
|---|---|---|
| Banks | Can verify funds before cashing Lower fraud risk | For customers only High fees around $10 per check |
| Credit Unions | Lower fees than banks Can verify funds | For members only Limited locations |
| Check Cashing Stores | No need for bank account Immediate cash | Very high fees Higher fraud risks |
| Private Sellers | Convenient if trustworthy | High fraud risks No recourse if check bounces |
| P2P Apps | Faster than check cashing stores Lower fraud risk | Moderate fees Funds not immediately available |
Tips for Safely Cashing Third Party Checks
If you need to cash a third party check, consider these tips to reduce your risk:
Whenever possible, cash the check at a reputable bank where they can verify the funds. This reduces the chance the check will bounce later.
Review the FTC‘s guidance on identifying fake check scams before accepting a suspicious third party check.
Require the person who endorsed the check to be present with valid photo ID when cashing the check to reduce forgery risks.
Start by cashing smaller dollar checks from known parties before accepting larger checks from untrusted sources.
Be very wary of anyone who demands immediate payment or tries to rush you during the cashing process as this can be a sign of attempted fraud.
Never accept a third party check as payment for work or items sold until the check has fully cleared to avoid losses.
Conclusion
Walmart‘s decision to stop cashing third party checks reflects growing risks around these transactions that impact the entire banking and retail industries. While third party check cashing is still possible in 2024, it requires using services designed to verify customers and funds to reduce fraud losses. With proper precautions, third party checks can still be cashed safely, just no longer at your local Walmart.
